The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has issued a stern warning to International Oil Companies (IOCs) and independent producers diverting crude oil meant for domestic refining. At a recent industry meeting with over 50 key stakeholders, including IOCs, refiners, and independent producers, NUPRC emphasized its commitment to ensuring compliance with the Domestic Crude Supply Obligation (DCSO). Companies failing to meet these obligations face denial of export permits, an enforcement measure aimed at protecting Nigeria’s refining capacity.
The meeting exposed tensions between refiners and producers. While refiners accused producers of prioritizing exports, producers defended their actions, citing the refiners’ failure to meet commercial and operational terms. Despite these disagreements, NUPRC’s frameworks and regulatory measures were recognized as necessary for policy implementation. The Commission’s Chief Executive, Gbenga Komolafe, warned that any changes to cargoes designated for domestic refining must receive prior approval, reiterating the legal obligations under the DCSO framework.
In an official letter dated February 2, 2025, NUPRC reinforced its stance, reminding exploration and production companies that crude oil designated for local refining cannot be diverted without express consent. Referencing the Petroleum Industry Act (PIA) 2021, Komolafe highlighted the importance of maintaining a stable crude supply to support Nigeria’s energy security. The Commission emphasized that penalties, including the denial of export permits, would be imposed on non-compliant companies.
To support enforcement, NUPRC has introduced the Production Curtailment and DCSO Regulation 2023 and a detailed procedure guide. The Commission is also actively monitoring production metrics, ensuring that crude availability is projected well in advance to enable proper planning for local refineries. The goal is to ensure that Nigeria’s refineries receive a consistent supply of crude for domestic processing.
Despite these efforts, tensions continue. Last year, Edwin Devakumar from Dangote Industries accused IOCs of inflating crude prices and claiming shortages, which led to the Dangote refinery importing crude at higher costs. This practice, he claimed, hinders Nigeria’s refining capacity and continues to harm the nation’s economy. As NUPRC tightens enforcement, it urged all stakeholders to operate within the legal framework, warning that any further breaches would attract severe sanctions.
Source: THE SUN